Economy & Trade, Headlines, Latin America & the Caribbean

BOLIVIA: Protesters Demand – and Get – Faster Nationalisation

Franz Chávez

LA PAZ, Feb 6 2007 (IPS) - Pressure from protesters in the Bolivian town of Camiri forced the government of Evo Morales to accelerate progress towards the effective re-nationalisation of the country’s energy resources, but at a cost of 12 demonstrators injured in clashes with the security forces and half a million dollars caused by the cut-off of fuel supplies to several cities.

In the wee hours of the morning on Monday, the eighth day of a strike that was blocking traffic from southern Bolivia to the Argentine border, a government commission and leaders of the Civic Committee of Camiri, 1,000 km southeast of La Paz, signed an agreement to open a local headquarters of the state-owned energy company Yacimientos Petroliferos Fiscales Bolivianos (YPFB) in the town.

The measure is a first step in the “refounding” and strengthening of YPFB as part of the nationalisation process decreed by the leftist Morales administration on May 1, 2006.

But the agreement was not reached until after the protesters closed off a key pipeline serving the capital and other cities for 15 hours and soldiers and police were called in on Saturday to regain control over the local natural gas facilities. Twelve people were hurt in the clash between the troops and the protesters.

“We have shot down the energy policy that privileges transnational corporations, and we took a small step, even though we were facing 2,000 soldiers, towards the true nationalisation of our energy resources,” journalist Mirko Orgaz, the vice president of the Camiri strike committee, told IPS.

“The policy of nationalisation that merely amounted to a modification of the contracts held by foreign oil companies has collapsed,” said Orgaz.

Sacha Llorenti, deputy minister of social movements and former president of the Permanent Assembly of Human Rights, told IPS that the concessions granted by the government in the complex negotiations went even beyond what the protesters were demanding.

On Monday, the protesters removed the rocks and logs blocking the main road through Camiri, where 200 trucks and hundreds of people in their cars were stranded since Monday Jan. 29 as a result of the traffic blockade.

Although according to the government’s plan for rebuilding the badly weakened YPFB, the facilities of the state company were to be concentrated in La Paz, the agreement reached with the striking workers will now involve the establishment of a YPFB headquarters for exploration and production in Camiri, a centre of energy industry production since hydrocarbons were discovered there in 1927.

Camiri is located in the eastern department (province) of Santa Cruz, where the country’s main oil and gas reserves are located.

Bolivia’s 48 trillion cubic feet of natural gas are the second largest reserves in South America after Venezuela’s.

The protesters got the government to agree to their demand that YPFB move ahead on Morales’ plan for the state to begin industrialising the country’s energy resources.

Under the agreement, a gas separation plant is to be built in the area, involving an investment of 100 million dollars and generating 500 jobs. The new facility did not previously form part of the government’s energy programme.

Llorenti and Energy Minister Carlos Villegas also committed to speeding up progress towards the recovery of a majority share for the state in the refineries in the cities of Cochabamba and Santa Cruz, which were built, and are administered, by Brazil’s state oil company Petrobras.

The protesters were demanding the purchase of a controlling stake in the refineries as the only way to guarantee domestic fuel supplies.

The government negotiators also pledged to take concrete steps towards the recovery of state control over the Chaco and Andina companies, which belonged to YPFB until the energy industry was privatised in 1996.

With the recuperation of a majority stake in the two companies, the state will also regain control over several smaller gas fields, which will begin to be administered by the YPFB in 2008.

Orgaz said “the government’s nationalisation policy has entered into crisis because the new proposal leads to the effective transformation of YPFB,” whose function is now limited to administering the contracts with the foreign oil firms, into a company involved in exploration, drilling, refining and marketing of gas and oil, “without intermediaries.”

With the creation of the new local headquarters in Camiri, the installation of the gas separation plant, and the recovery of smaller gas fields and refineries, the aim of restoring the YPFB to what it was prior to privatisation will be much closer, said José Domingo Veliz, president of the strike committee.

Guillermo Aruquipa, deputy minister for exploration and production of hydrocarbons, agreed with the objectives laid out by the Camiri Civic Committee and said the government would immediately begin setting up the new local YPFB headquarters.

The Morales administration had failed to make progress towards rebuilding YPFB due to lack of funds and internal discrepancies that led to the resignation of energy minister Andrés Soliz Rada and YPFB presidents Jorge Alvarado and Juan Carlos Ortiz.

In late October, 12 foreign oil companies accepted a modification of their contracts with the Bolivian government, a change of rules that brought the state’s share of revenues to 82 percent in the case of large gasfields.

As a result of the renegotiation of the contracts, the state’s oil and gas revenues will go up to one billion dollars a year, from 250 million, and in the future could climb as high as four billion dollars a year, according to government officials.

Morales’ nationalisation process has not involved the confiscation of the assets of foreign oil companies in Bolivia, but did declare the country’s energy resources as state property.

The government strategy put YPFB back in control of the entire chain of production as well as domestic natural gas prices, and gave foreign companies six months to renegotiate the terms of their contracts.

YPFB will now pay foreign companies for their services, offering about 50 percent of the value of production in the case of smaller gasfields, and just 18 percent in the case of the largest fields.